DraftKings Raises Another $100 Million Despite Pending Merger

Darren Heitner
, ContributorI cover the intersection of sports and money.Opinions expressed by Forbes Contributors are their own.

(AP Photo/Charles Krupa)

DraftKings receives a delivery of roughly $100 million through a new round of funding.

Daily fantasy sports operator DraftKings has raised roughly $100 million in a Series E1 round of funding. The new round of funding adds to existing investment in DraftKings that exceeds $780 million prior to the Series E1 announcement.

The news comes after DraftKings and FanDuel declared their intention to merge back in November 2016. The merger has not been completed to date and is in limbo until the Department of Justice and Federal Trade Commission determine whether it should be approved. Forbes contributor Marc Edelman believes that it would not be the least bit surprising if the aforesaid entities express concerns about the merger based on a combined entity controlling around 95% of the daily fantasy sports marketplace.

In fact, DraftKings' recent $100 million raise could be a hedge on any risk of the merger being denied. According to an industry source, FanDuel is in the process of raising additional capital as well, with both companies feeling as though there is no choice but to operate under the assumption that the merger does not go through. If the merger collapses and the operators do not raise money, then they would have serious operational issues, per the source.

The Series E1 round of funding for DraftKings was led by Eldridge Industries, a Connecticut-based investment firm that includes Los Angeles Dodgers co-owner Todd Boehly. The investment firm recently led a $5 million funding round in Renegade Brands, a Cleveland-based provider of cleaning systems for sports gear and apparel. It describes itself as a fund that focuses on finance, media and real estate.

"We were looking for a funding partner who could bring additional depth to the table. The exceptional team at Eldridge does that through their incredible knowledge and success with media properties," said DraftKings CEO Jason Robins.

ESPN Sports Business Reporter Darren Rovell believes the investment is a strange play for Eldrige Industries unless it believes that DraftKings will be in a strong position if/when there is legalized online sports betting throughout the U.S.